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Comment by c1sc0 | Hacker News Reader

As the crisis moves forward we will probably see a fraction of every profession moved to developing countries. Either by Western professionals who move there to enjoy the lower cost of living or outright replacement by outsourced professionals. So this doesn't really surprise me.

I've started to think about outsourcing as a long-overdue redistribution of wealth & as such I'm not opposed to it: if you can work more efficiently by outsourcing, you should outsource. Most employees in the West are spoiled brats & deserve to be shaken a little anyway.

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But no-one wants to live in a world like that. Imagine

    * All airlines are like RyanAir
    * All restaurants are fast food
    * All supermarkets are Lidl
    * All music is Autotune
    * All clothes are polyester

A race to the bottom is stupid and ultimately self-destructive, the money you save in the short term you lose tenfold in the long term when everything you actually want is bespoke because the middle-market mass producers have all been bankrupted.

Doesn't sound that far off from the world we actually live in.

So if we outsource stuff to India, all the sit-down resturants in the United States will be forced to close?

What?

If there isn't a sufficiently large class of people with both the money and the leisure time to be able to support the restaurant industry; yes.

It's like this, if people who were earning enough to afford a decent sized apartment in a safe neighborhood with enough left over to eat out once in a while are all fired and replaced by overseas workers; their disposable income spending goes away too. And thus all of the businesses that were dependent on their being customers go away too.

If we outsource lawyers, now everyone who was previously a lawyer can do other productive work; to keep things simple, imagine they all become maids/housekeepers. After this transition, we get the same legal services we had before (but provided by different people) and some people have cleaner houses.

This may be bad for the lawyers and people in India who need legal services, but it's good for everyone else.

we get the same legal services we had before (but provided by different people)

Yes that is the theory, but in practice I've yet to encounter a situation where outsourcing is as seamless as that. Generally communication overhead goes up and quality of service goes down. Ask anyone who's ever been put through to an outsourced call centre. Or spent more time writing a spec for an outsourced IT worker to implement 10 timezones away than it would have taken them to do the work themselves.

The only people outsourcing is actually good for is those managers who are going to get a bonus for saving money this year and no downside in five years when the friction between the parts of the organization has reached the level that it seizes up and everything has to be brought back in-house.

...Good story, dude. What's the point? That outsourcing will eventually be abandoned because it will fail? Then why are you afraid of it?

Guys, if you want to start arguing against outsourcing, you're gonna have to start making economic sense. It's a hard position to take--and very few economists take it--because it is very hard to economically justify protectionism.

Right now I'm picturing some hacker sitting in Indonesian-made clothes, typing into his Chinese-made keyboard with ICs from Taiwan (or wherever) angry posts about how globalization is destroying our economy and depriving us of value. Meanwhile, the average wage of the low-class Chinese worker (as an example) rose 17% over the last year.

Outsorcing is just globalization continued. And the people who complain about the low quality of outsourced labor remind me of Doc Brown in "Back to the Future", in a scene set in 1955: "No wonder this circuit failed... it was made in Japan..."

OK, in economic terms, I don't think outsourcing as often practiced in services and high tech adequately accounts for externalities. If someone is incentivized - through say a bonus system - to prioritize the short term over the long term then that is what they will do. If this means closing a call centre in the West and opening one overseas, then that might make perfect sense right now. Will it make so much sense when customers go elsewhere? That is what I mean when I say that a race to the bottom ultimately destroys rather than creates wealth. Some of your customers will go elsewhere. Some will simply stop using that product or service altogether.

There are already signs this is happening; Nat West (a UK high street bank) are now advertising "only UK call centres". Now, it doesn't matter one little bit that their cheque processing is done in India, that is, to borrow a bit of programming jargon, referentially transparent. That is just one example.

So what I am afraid of? I am afraid of being personally inconvenienced by the interests of the organizations I transact with being further misaligned with my own. In other words, it's a tragedy of the commons scenario. So I know it will fail. I just don't see why we have to go through the pain first when there's no need.

The existence or nonexistence of outsourcing won't change the fact that people do not always make the optimal economic decisions. The fear of some economic agent making a suboptimal decision is a pretty poor reason to argue against anything, unless there's something intrinsic to the economic good in question that inspires suboptimal decisions (drugs, gambling).

In fact, when it comes to drugs, I bet the majority of people people on this website would support legalization of at least some drugs, and allow people to make their own bad decisions. But we're still poisoned with the notion that companies in market economies in general have to be prevented from making sub-optimal decisions. Why? Why do people still think this?

Hey, I'm not calling for protectionist laws or anything. I'm just pointing out that people who outsource are optimizing the wrong thing if their goal is net wealth creation in the long term. And it most likely is; we'll all retire one day.

Gambling is an entertainment product; it's no more or less a suboptimal use of money than going to the movies.

But maids and dishwashers don't eat out as often or as well as journeyman lawyers. What happens to places subject to this type of dislocation is similar to what happens to ecosystems undergoing desertification; fewer species, and the ones that survive are hardier and use far fewer resources. The trattorias go away, and all that's left are taco stands and bento carts.

It's certainly true that Legal Grounds Cafes (a chain of coffee shops which is often situated near courthouses) might suffer. But on the other hand, a consumer of legal services has more money to spend on restaurant meals.

Over the past 20-30 years, we have outsourced a huge amount of labor to other countries, and we outsourced even more of it to machines. And yet, we are more prosperous, have more consumer goods, and we generally eat out more often. Why is that?

(Incidentally, I generally find that the truck food is superior to restaurant food in Jersey City. I love thetacotruck and the H1B cart isn't bad either. Au Bon Pain, meh.)

They will if "what's the cheapest option, I don't care about the quality" becomes the default choice. Outsourcing is a symptom, not the root cause.

As long as a sufficient number of people care about quality, quality won't go away. People still go to the symphony, wear fancy American-made clothes, eat out at resturants, fly business class, and shop at farmers' markets. These things are more expensive than the alternatives, but it's not that they've gotten more expensive so much as the alternatives didn't used to exist. For example, before airline deregulation, only the well to do could afford to fly. Before industrialized food, the urban poor lived in poverty and malnourishment, with infant and child death rates comparable to what you'd expect to see in developing countries today.

Also, part of living in a capitalist society is you have no right to tell other people how to spend their money.

Oh absolutely.

Some routes I fly are only serviced by Ryanair, and I sometimes see business travelers who buy two seats so they can put their work next to them. No doubt they, or at least their companies, are delighted at how much money they're saving compared to BA. I keep meaning to ask one, are you working so hard so you can take your family on holiday to Butlin's in Skegness?

"Most employees in the West are spoiled brats & deserve to be shaken a little anyway."

Sure, we should know our place like good little slaves, right? Hauteur and arrogance are not a valid basis for rational argument.

"Most employees in the West are spoiled brats & deserve to be shaken a little anyway."

Many have been shaken a lot by the effects of outsourcing.

>Most employees in the West are spoiled brats & deserve to be shaken a little

How do you prove this?

He doesn't, this is a discussion forum not a journal article.

We don't require you to cite sources.

But that doesn't mean that you can talk whatever you want, does it?

correction: this is a reasonable discussion forum...

Most people in the West are way higher up on Maslow's pyramid than people in the developing world. There's no arguing with basics like availability of clean water, food, clothing, healthcare. After your basics are covered it's up to you to decide whether you work your ass off improving yourself or settling for the status quo of luxury that living in Western society provides.

Whenever I come back from a developing country I think "We're fucked & we deserve it". People in developing countries are just as capable & ingenious; they are more likely to work hard because they see a path of progress in front of them. In the West we have become so accustomed to our luxuries that instead of working harder, we settle for the status quo far too often.

But isn't life all about living happily?

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